Nigeria earned N5.56 Trillion from oil in 2011

March 6, 2012 – Nigeria earned N5.56 Trillion from oil in 2011

The Federal Government, yesterday, said Nigeria earned a total of N5.561 trillion from oil and gas in 2011. www.naijagists.com

The Federal Government, in its revised 2011 to 2014 Revenue and Expenditure Framework document obtained by Vanguard, disclosed that after deducting the 13 per cent derivation fund, the country was left with N4.838 trillion for distribution to the various levels of government by the Federal Account Allocation Committee, FAAC.

However, the Federal Government is projecting a 21.35 per cent drop in oil and gas earnings to N4.374 trillion in 2012, while the amount accruable to oil producing states under the 13 per cent derivation formula is expected to drop to N568.59 billion in 2012, with N3.805 trillion available for distribution by the FAAC.

Also, government is projecting total oil and gas revenue of N5.174 trillion and N5.249 trillion for 2013 and 2014 respectively; 13 per cent derivation distribution of N672.63 billion and N682.38 billion for 2013 and 2014, while projected balance of oil revenue available for distribution by FAAC is N4.501 trillion and N4.567 trillion for 2013 and 2014 respectively.

The 13 per cent derivation fund accruable to oil producing states has been a major issue of contention, over the past years, with some non-oil producing states calling for its discontinuance, while some oil producing states are calling for increase in the figures.

The Governors of the 19 Northern states had a couple of days back advocated a review of the revenue allocation formula due to what they called perceived inequality in sharing of the country’s revenue.

The governors are of the opinion that the current revenue sharing formula will not help in promoting equity, adding that until equilibrium is achieved, they would not give up.

The Northern governors also called for a review of laws on the ownership of oil blocs in the continental shelf.

According the Northern Governors, all oil blocks outside the 200 kilometres of the continental shelf should be shared as a commonwealth, rather than allowing a few states to share the proceeds.

Also, the Arewa Consultative Forum, ACF, had said it would press for a review of the present revenue sharing formula on the basis of what it claimed was the increasing financial disparity between the north and the south.

The ACF declared that the Niger Delta states and other oil producing states have lost their leverage on oil revenue, given the fact that 78 per cent of the nation’s oil revenues are now obtained offshore.

However, South-South leaders and other economic analysts have kicked against this argument by the Northern leaders, saying the ongoing debate has brought to the fore the need to review Nigeria’s fiscal structure.

They called on the northern leaders to undertake a tour of the riverside oil communities of the Niger-Delta by boat to see the difficult terrain, degradation and pollution to fully realize the implication of their demand.

According to them, it is a well known fact that the South-South had remained consistent in their quest, over the years, for a review of the revenue allocation formula on grounds that the 13 per cent derivation to oil states was insufficient, and so, for anybody to say that 13 per cent should be further slashed was insulting.

Professor Anya Anya had told Vanguard that the Northern governors’ clamour was reflective of a desperate effort of a failed leadership which superintended the affairs of the country for 38 years out of her 51 years existence as an independent nation.

He said, “What the Northern governors were asking were some of the problems they created during the 38 years the north held the leadership of the country. They brought the problem to being.

“They should start interrogating their leaders on what they did to alleviate poverty when they ruled the country.”

Also commenting on the issue, Senator Victor Ndoma-Egba, Majority Leader of the Senate and leader of the Senate South-South caucus, said, “It is something that could go either way. If you recall, historically there has been this agitation by the South-South that 13 per cent is inadequate.

“For me the time has come to take a totally new look at the fiscal terms of our federalism. We have to review it because what we are using now has its origins not in negotiations but from the days of the military and since then we have been doing incremental adjustments here and there. We must go back to the basis and negotiate the fiscal terms of our union.”